FCC Urged to Revise Standards for TV Product Disclosure

The General Accountability Office on Thursday urged the Federal Communications Commission to revise standards for disclosing TV product sponsorships whether for product placement, video news releases or political advertising.

Pointing to one FCC guidance citing how broadcasters should treat the use of “expensive kinescope prints” provided by sponsors in putting together a news story, the GAO said the current standards are stuck in a time warp. Changing technologies and changing marketing practices as causing most of the need for the new standards, the GAO said.

“FCC guidance for the sponsorship identification requirements has not been updated in nearly 50 years,” the GAO said in its 35-page report. It suggested that while the FCC last revised its rules in 1992, the related guidance provides little useful information.

The report was requested in January by House Democratic Leader Nancy Pelosi, D-Calif., and Rep. Henry Waxman, D-Calif. They questioned whether DVR and commercial-skipping were prompting sponsors to switch to alternative forms of advertising that wasn’t always being fully disclosed.

The GAO report laid out the biggest question as being about broadcasting trends.

“As broadcasters facing budget constraints make greater use of commercially sponsored content, such as commercial products as part of entertainment programs, some members of Congress are concerned that broadcasters are not properly disclosing sponsorship information to the public,’’ it said. It cited as an example product placement within a TV reality show or sitcom.

The GAO report suggested that broadcasters may be somewhat confused about disclosure requirements because the FCC’s examples are so outdated, because technology has changed and because the agency takes too long to resolve placement complaints.

It also said the FCC doesn’t tell TV stations when complaints have been rejected, leaving the stations uncertain about the outcome of complaints that might help in subsequent complaints.

While suggesting the FCC needs to review its requirements and update its guides, the GAO report offered few specifics on how to do so.

Waxman in a statement Thursday praised the report.

“The American people deserve to know when and by whom they are being persuaded – and it is the FCC’s job to ensure that they do,” said Waxman, the ranking Democrat on the House Energy and Commerce Committee. “I urge the FCC to take full advantage of the authority already granted by Congress to provide maximum transparency for consumers and voters.”

Rep. Anna Eshoo, D-Calif., left, the ranking Democrat on the committee’s communications and subcommittee, said she was hopeful the FCC would use the GAO report to push forward in ensuring that providers of political ads are identified.

“The 2012 election cycle made it abundantly clear that our electoral system and campaign finance laws are badly in need of reform,” she said in a statement. “It’s time for the FCC to play a crucial role in bringing greater transparency to America’s electoral system by requiring sponsors of political ads to disclose their true identity.”

Pelosi said the report “makes clear that the FCC has the power, the authority, and the responsibility to shine a bright light on the organizations and campaigns behind our political advertisements.” “The FCC must simply update its rules to reflect the law, ensuring disclosure in our elections, transparency in our campaigns, and fairness for all voters,” she added.